News

Modernizing the lock approach

April 5, 2006

This article appeared in the ATM & Financial Self-Service Executive Summary, Spring 2006.

Denali Alaskan Federal Credit Union, an Anchorage, Alaska-based financial institution, was spending a lot of time and money on ATM operations. Ensuring security, managing keys and keeping track of who accessed an ATM when had become burdensome.

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The credit union, with $340 million in assets, 47,000 members and 10 branches, has ATMs scattered across Anchorage, Juneau, Fairbanks and Wasilla. Although its 33-ATM network includes eight on-site machines, tracking service techs and armored carriers coming and going to its off-premise locations posed a few logistical problems.

"We had a couple of issues," said John Layton, Denali Alaskan's payment systems vice president. "Basically, we had an armored car company providing service for cash and we provided first- and second-line service. We had to know who had access to the ATM, but to do that we had to go out with the armored company. Otherwise, the armored company would have to control the lock."

Denali Alaskan also faced the challenge of ensuring that no one staff member knew too much.

"Since we were doing so much service and maintenance on our own ATMs, and because we have a rotating schedule of staff, it was almost impossible not to have a staff member who didn't know both halves of the combination," Layton said. "At some points, you'd also have the same person who had the combination and keys, and that botches your whole system."

In August 2005, Alaskan Denali started working toward a solution that it hoped would address its dilemma. Through a beta program with Torrance, Calif.-based La Gard Inc., the credit union began using La Gard's Web-based electronic lock, Navigator.

Navigator, which officially hit the market in first-quarter 2006, eliminates the need for keys and codes. And because it is server-based, it also creates an audit trail.

Orlando Consalvi, La Gard's national product manager, said Navigator keeps a detailed record of ATM entrants.

"One opening of the safe with Navigator creates three audit records: the time the user queried the server to get access, the time he opened the lock, and the time the lock bolt extended," he said.

Figuring out the gray areas of audit compliance has benefited Navigator's pitch. Visa requires FIs and independent sales organizations to maintain audit trails.

For Denali Alaskan, that was one facet that made Navigator attractive. An added bonus: Denali Alaskan reduced its full-time employee pool by two after installing Navigator on its 25 off-premise ATMs. Within 90 days, the FI also realized a return on investment.

"Navigator gave us a true audit trail," Layton said. "And because it's server-based, it's basically cell-phone based.

"Because we can use cell phones, we can make cell phones available to our ATM technicians or the armored car company. It doesn't matter, because they have to use their own code and password (to log in), and people are not handing off keys and combinations."